GM Dials Back Fleet Sales in U.S.
General Motors Co. is likely to report flat July sales on Monday because it is trying to reduce low-profit sales to rental car fleets.
#economics
General Motors Co. is likely to report flat July sales on Monday because it is trying to reduce low-profit sales to rental car fleets.
Kurt McNeil, GM's head of sales, tells Bloomberg News the company is sacrificing short-term market share to help elevate its margins.
Fleet sales offer meager profits because such high-volume deals involve greater discounts than individual car buyers get. Analysts point out a second reason to limit fleet sales. When fleets later dump such cars into the used-car market, they explain, those units can reduce retail demand for new cars and trucks.
Carmakers use fleet sales to increase their monthly volume and thereby bolster their market share calculations. Analysts say retail sales figures provide a better picture of the actual car market.
GM trimmed its rental fleet sales by 14,000 units in July and plans to pare 60,000 units out of such sales in the second half of 2015, according to Bloomberg.
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